The strongest predictor of car prices can be found by looking at the classic supply and demand curve. One would think that the huge drop in gas prices over the last few weeks would decrease the demand for high-tech, fuel efficient cars—and therefore—lower prices for these vehicles. However, current data suggests this is not happening.
Americans car buyers are not forgetting the Summer of 2006, and its spike in gas prices. “They are planning for the future.” Says longtime Tampa, FL car salesman and Internet Manager for a prominent dealer. “There is unpredictability in Gas prices, and Americans recognize this. They are expecting a big hike in gas prices."
This dealer is not alone. A recent J.D. Power and Associates study revealed that more than ever car buyers are rejecting a particular car based on their fuel efficiency or inefficiency. In addition, dealers across the nation still maintain they cannot keep hybrid and fuel efficient cars on the lot. In many cases, there is a two to three week waiting period for hybrid cars.
While overall car sales are down 4% (economy.com), passenger cars are up about 3%. Accordingly, SUV sales are down 18%, truck sales down 14% and van sales down 12%. Hybrid sales are up 16%.
What Does this Mean For the Bottom Line Prices?
For hybrid cars you are going to pay sticker (MSRP) or higher. If you really want that hybrid car, you should price a hybrid and get one as soon as possible. We expect Hybrid car prices to come down, but not for at least two years when the 2008 and 2009 models start to roll out.
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